A contract dispute between Sutter Health and Blue shield may leave nearly 280,000 Northern and Central California consumers searching for someplace else to get health care.
Blue shield has already notified more than 139,000 of its customers last week and plans to inform 140,500 more later this month that they should better be prepared to find health care providers outside Sutter Health system. If the contract has not been signed, the customers will have to pay more if they choose to stay.
This means that many of the Blue shield customers could be cut off from Alta Bates Summit Medical Center in Berkeley and Oakland, San Francisco’s California Pacific Medical Center and the Palo Alto Medical Foundation. Depending on their type of plan, many have to find new hospitals and doctors by April and many have to until end of June.
Stephen Lawton of Hercules, who has been seeing the same physician since 1976 said “I don’t want another doctor, and there’s no reason I should have to have another doctor. While the whales fight it out, all of us little minnows get squished.”
Many of the disputes among the insurers and hospitals are resolved without involving the consumers. The last contract between Sutter and Blue Shield expired Dec. 31, and both sides continue to talk.
The battle pits a major not-for-profit health insurer, with profits of $171million on revenue of $10.5billion in 2013, against a formidable opponent, a nonprofit with 23 Northern California hospitals that made $300million in profits on operating revenue of $9.6billion that same year.
Sutter officials blamed Blue shield for the insurer’s proposal reducing payments for health services by what the hospital network says is too much.
Sutter spokesman Bill Gleeson said “Unfortunately, this large and very powerful health insurance company continues to demand substantial cuts in reimbursements that would have a devastating impact on Sutter Health’s ability to meet our patients’ needs,”
While Blue shield lashed back at Sutter, saying the health network charges 18 to 30 percent more than other providers for its services.
Paul Markovich, Blue Shield’s president and chief executive, at a meeting with The Chronicle’s editorial board on Wednesday said “We can’t keep paying at that level and increasing that amount,”
Markovich said he’s drawing a line over one issue: He says Sutter wants a mandatory arbitration clause in the contract that would prevent Blue Shield and self-insured customers, typically large companies that pay their own claims, from suing in open court. A lawsuit against Sutter in April by the United Food and Commercial Workers and its Employer alleging anticompetitive behavior is winding its way through San Francisco Superior Court.
Steven Rousso, principal with HFS Consultants, an Oakland consulting firm for hospitals and clinics, said the tussle comes down to two health care powerhouses duking it out over money.
“It all comes down to the financial terms of the contract. This is a battle of big dogs; there’s no little dog in this fight.” Rousso said.
The customers were really annoyed with the contract dispute among Blue shield and Sutter’s contract right after they signed up for 2015. “Next open season, if there’s no change here and I can’t go to Summit without paying a premium, Kaiser’s looking pretty good,” Van de Naillen said.
